The world of product marketing is highly intense and competitive, with the understood intent to increase the gross sales of a given product. Among the many calculated strategies manufacturers utilize to this end is the dissemination of "cents-off" coupons. This technique benefits all parties concerned, the manufacturer, the retailer, and the consumer. The manufacturer gains as his product is publicized, although he must sacrifice some of his profits. The retailer is happy as consumers comb his store in search of the item being discounted. And, of course, the thrifty consumer is the most eager of all as he saves some money at the check out. However, as might be expected, at least two major and ominous problems come on the scene to greatly complicate things.
Firstly, the implementation of coupons is an enormous and tedious business. According to figures supplied by the A.C. NIELSEN COMPANY, coupon distribution reached a peak of 179.8 billion in 1985, which was double the 1980 figure of 90.6 billion. Consumers redeemed 6.25 billion coupons in 1984, a 12% increase over 1983, and saved a total of $2.06 billion on their shopping bills. Yet, unbelievably, from the consumer's redemption of the coupon through the retailer's reimbursement, counting the coupons is done by hand! The check-out clerk, to whom a coupon is presented, must "manually" look over the coupon, which not only wastes precious check-out line time as the clerk must carefully look over the coupon, but also reduces accuracy of the operation. Examples of potential error may include overlooking an expiration date, or overlooking the exact product specification for which the coupon is valid, i.e. only a certain size package may be stipulated on the coupon.
Next, the store manager's daily duties include collecting and tracking the coupons redeemed in his store. In a large supermarket, there is likely to be a large volume of coupons redeemed, resulting in a substantial amount of manual, time-consuming, and error-prone work. The coupons are then generally passed on to a third party, referred to as a coupon clearing house, which processes the coupons received from many retailers, pertaining to a multitude of manufacturers. However, this too, is all done by hand! Typically, the sorting and counting work is done out of the country, where it may be done more cheaply, and the results returned to the U.S. for billing the manufacturer and crediting the retailers. As would be expected, this very loose loop inevitably results in the retailers claiming they are under-credited, and the manufacturers claiming over-billing.
Thus far, only half of the problem has been addressed. Another obstacle of substantial proportion, which threatens the overall productivity and efficacy of coupon usage, is that of fraud. One estimate of fraudulent coupon redemption given a few years ago is that at least $350 million a year is lost through coupons unlawfully redeemed. Such swindling can take place in a number of ways. Firstly, an overbearing customer can intimidate a young cash register operator into accepting a coupon for the wrong size product, for a different brand, or for an entirely different product. Particularly in larger and busier stores, the register personnel may have the opportunity to slip a stack of their own coupons into the cash register and exchange them for cash. Also, the retailer can accumulate, through any number of methods, quantities of coupons and present them to the coupon clearing houses for payment. The vain warning which appears on many coupons, "Invoices showing purchase of adequate stock to cover all coupons redeemed must be shown upon request," would be so astronomically costly to enforce, that there is much room for coupon cheating.
Although inventions have surfaced which address different deficiencies of the current couponing system, none have solved all of the problems. The present invention introduces an accurate and fast mode of coupon redemption at the check out, foolproof cancellation of a redeemed coupon preventing reuse, electronic tabulation of coupon redemption which will eliminate the need for tedious and less reliable hand-tallying of coupons, and the establishment of a reliable audit trail to the purchaser's transaction for verifying compliance with the terms of the coupon.